With 70% stake, institutions possess the maximum shares in the company. It looks like hedge funds own 14% of Universal Technical Institute shares. Along with the weak revenue is the high cost structure of the company, much of which is fixed. 4 out of 5 UTI graduates find employment in careers within their field of study within 1 year of graduation. UTI welcomes General Education Diploma students. Find the campus that matches your career goals here. UTI operates 16 campuses located in 9 states and offers a wide range of transportation and skilled trades technical training programs under brands such as UTI, MIAT College of Technology, Motorcycle Mechanics Institute, Marine Mechanics Institute, and NASCAR Technical Institute. The acquisition of NTT and PTA was completed for approximately $50.2 million. You can also generally opt-out of receiving targeted ads from third party advertisers and ad networks who are members of the Network Advertising Initiative (NAI) by visiting http://optout.networkadvertising.org. UTI has not entirely avoided allegations of wrongdoing either. As at March 2021, Universal Technical Institute had cash of US$78m and no debt. Talk to potential employers to learn more about the programs available in your area. UTI also authorized a buyback program of $25 million in 2011. Of those three veterans continue to be the most successful segment, with 21 straight quarters of application growth. Universal Technical Institute of Illinois, Inc. is approved by the Division of Private Business and Vocational Schools of the Illinois Board of Higher Education. For more information, visit www.uti.edu, or follow on LinkedIn @UniversalTechnicalInstitute and on Twitter @news_UTI. [21] A planned Miramar, Florida campus opened in Summer of 2022. All statements contained in this press release, other than statements of historical fact, are "forward-looking" statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). As a result, the company is likely to default on the promises implied by the stocks lofty valuation. Concorde Career Colleges is a leading provider of healthcare education programs focused on preparing students for successful professions in the healthcare sector, which is expected to add about 2.6 million new jobs over the next decade due to attrition in the workforce along with an aging population that is expected to drive increased demand for healthcare services.1 The company offers diploma and degree programs across nursing, dental hygiene, and other direct patient care fields including physical therapy assistant and respiratory therapy, as well as allied health including medical and dental assisting and healthcare administration. Dear Better Business Bureau of Orlando, On Monday, August 15, 2022, Universal Technical Institute (UTI) Orlando, FL campus received complaint case #XXXXXXXX. Since there isn't much else the company can do, as it must increase student starts, it apparently is a risk it's willing to take to stem the steep decline in its student body. 41) For Automotive Service Technicians and Mechanics, the U.S. Bureau of Labor Statistics projects an annual average of 73,300 job openings between 2021 and 2031. Further, if you use multiple browsers or devices, you will need to execute this opt-out on each browser or device. [7], On September 27, 2016, UTI reported that its president and CFO, Eugene Putnam, was removed as part of a financial improvement plan and that Kim McWaters replaced him as president. Jami Frazier will serve as the Divisional President, reporting to CEO Jerome Grant. Our data reflects individual insiders, capturing board members at the very least. In response, UTI has increased its scholarship opportunities to attract new students but it has also been forced to raise tuition to prevent revenues from falling in the face of declining enrollment. Universal Technical Institute serves three student segments: high school, veterans, and adult. Any forward-looking statements made by UTI in this press release are based only on information currently available to UTI and speak only as of the date on which it is made. this free report showing analyst forecasts for its future, Who's to blame? The private educational sector continues to face a lot of headwind, and UTI hasn't done very well at successfully implementing new strategies to deal with the realities of the market they serve. sharing for online advertising may be considered a sale of information. With the acquisition of Concorde complete, the Company will operate and report as two divisions. "This transaction marks a major milestone in executing our strategy as we expand the scope of our skilled education programs to serve students' varied workforce-training needs and drive growth for the company. If they do, the company may get a bump up in share price because of low expectations. These companies may use this data to serve you more relevant ads as you browse the internet. PHOENIX, May 3, 2022 /PRNewswire/ -- Universal Technical Institute, Inc. (NYSE: UTI), a leading provider of transportation and technical training programs, has entered into a definitive agreement to acquire Concorde Career Colleges, Inc.from Liberty Partners LLC. "Their core focus of delivering strong student and employment outcomes aligns closely with Concorde's values of being student-centered, community-based, and achievement-driven. All shareholders and investors need to watch to evaluate the company is its success or failure at growing its student population. Universal Technical Institute was founded in 1965. rate. Access your no-cost report to get info on jobs in demand in your area, industry insight from top employers, and more. You may opt-out of receiving targeted advertisements from other companies that perform interest-based advertising services, including some that we may work with, via the Digital Advertising Alliance (DAA) site at http://optout.aboutads.info. Talk to potential employers to learn more about the programs available in your area. They aren't always helpful and tuition way overpriced. While UTI likes to trumpet its 80% job placement rate, it is difficult for students pay off loans of almost $50,000 for tuition and living costs on an entry-level mechanics salary. The high school segment is made up largely of males as it relates to UTI, and it's working on engaging that tough demographic by building relationships with the students while they're in high school. I understand that my consent is not required to apply, enroll or make any purchase. The firm said it grew adult applications by 10 percent (year-over-year) in April, and while cautious in outlook because of it being only one month, it is the first time in a long time since adult student applications increased. This data contradicts McWaters explanation for the companys recent underperformance. In 2011, a former employee filed a lawsuit against the company accusing it of violating Title IV regulations in its compensation incentives for admissions representatives. Find out what some of our graduates are doing today in pursuing their successful careers. The most recent data shows that average enrollment has again decreased in 2014, which exerts further downward pressure on profitability. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. We have 9 programs at 13 locations. Adult students are even more of a challenge, as the value of education at the current price levels is being questioned as it never has been before, and that shows in the 17 percent drop in adult applications at UTI in the second quarter. I generally consider insider ownership to be a good thing. At the time of its initial public offering, UTI carried a debt load of $57.3 million. Other than cutting variable costs, the other major thing UTI must do is build back its student population. The acquisition expands Universal Technical Institute's portfolio of offerings into the higher-growth healthcare arena and creates the opportunity to bring workforce educational solutions to a broader array of students and employers. Divided Government And The Way Forward For The Markets, How Negativity Bias Leads To Mistakes In Portfolios, Transforming The Wealth Management Experience For Todays Client, MoneyStamps Of South America - As Investments, Theyre Different Part 1, Covid-19 Related Municipal Defaults Begin, The Dynamics Of Price Discovery In The Stamp Market, limit the amount of debt that students can take on in career-training programs, grow NOPAT by 17% compounded annually for 12 years. Increasing inquiries is one thing, converting them to students is another; and UTI hasn't been good at doing that recently. One will be comprised of Concorde and its leading healthcare education programs and campuses. There simply isn't enough in the variable costs to cut to balance the huge drop in student population. That means it had a cash runway of about 2.2 years as of March 2021 . [2], At its peak in 2011, UTI had more than 18,000 students. Concorde Career Colleges operates across 17 campuses in 8 states, offering programs in the Allied Health, Dental, Nursing, Patient Care, and Diagnostic fields. Given the changing regulatory landscape and revenue decline in addition to UTIs mountain of off-balance sheet debt, it seems more likely that this company will go out of business than be bought out. Universal Technical Institute will post an updated presentation regarding its growth and diversification strategy on its investor relations website. Under Jami's leadership, UTI's first step into healthcare will serve as a solid cornerstone for some of our key future growth and diversification efforts.". We choose to disclose this non-GAAP financial measure for Concorde because it provides an additional performance measure. With 15 core programs and 16 campuses nationwide, UTI helps students turn their passion into a career they can pursue in less than a year.1. information about your activities on our website, which is then associated with your browser, device or online identifier. Universal Technical Institute defines estimated adjusted EBITDA margin as estimated adjusted EBITDA over estimated revenue. Other than lowering fees and boosting scholarships, I don't see any way UTI can deal with one of the major headwinds it faces, which is the strong reluctance of consumers to take on debt. "The $50 million purchase price provides a compelling enterprise value to adjusted EBITDA multiple and an opportunity to significantly increase our shareholder value. There is an outside possibility new student starts may improve in the fourth quarter, although it would be a surprise. I also cant see any reason why another firm would buy out UTI. Of those three veterans continue to be the most successful segment, with 21 straight quarters of. UTIs recent history of extremely poor capital allocation does not give me faith in the company to execute this kind of turnaround. The school offers specialized technical education programs under the banner of several brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (MMI), MIAT College of Technology (MIAT), and NASCAR Technical Institute (NTI). In the near term money could be made shorting it, and the risk there would be if for some reason the company was able to exceed expectations for new students' enrollments. Whether or not UTI is truly guilty of any wrongdoing, the presence of these allegations against it and for-profit schools, in general, serves as a deterrent to potential students. Job openings include openings due to net employment changes and net replacements. Instead, they are based only on UTI's current beliefs, expectations, and assumptions regarding the future of its business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Grant to Succeed Kimberly J. McWaters as Chief Executive Officer", "Universal Technical Institute Completes Acquisition of MIAT College of Technology", https://www.bizjournals.com/phoenix/news/2021/11/05/phoenix-school-back-in-growth-mode.html, "Universal Technical Institute Will Add 15 New Programs in Transportation and Skilled Trades Across Its National UTI/MIAT Campus Footprint", "UTI Adding New Automotive, Skilled Trade Programs | THE SHOP", "Universal Technical Institute Expands Platform of Workforce Solutions Offerings with Completion of Concorde Career Colleges, Inc. Acquisition", "Universal Technical Institute, Inc. to Acquire Concorde Career Colleges, Inc., a Leading Provider of Healthcare Education Programs", "Universal Technical Institute plans $50M acquisition of Concorde Career Colleges", "Ford to collaborate with Universal Technical Institute on EV training curriculum", "Universal Technical Institute Selects Bosch to Develop New Courseware Supporting its Electric Vehicle Training Strategy", https://www.bizjournals.com/phoenix/news/2018/02/08/uti-stock-up-while-stemming-losses-as-enrollment.html, "Universal Technical Institute Celebrates Opening of Austin Campus", "Universal Technical Institute Selects Miami Metropolitan Area As The Location For The Second New Campus It Plans To Open In 2022", https://en.wikipedia.org/w/index.php?title=Universal_Technical_Institute&oldid=1133240788, This page was last edited on 12 January 2023, at 21:12. The current price of the stock implies the company will generate outsized profit growth far beyond what I think is likely to occur. PTA organized lecture training seminars in markets similar to NTT. Luckily, you can check this free report showing analyst forecasts for its future. Even though UTIs stock price is down 50% over the past five years, the company remains significantly overvalued. Those numbers are likely to fall. In order to justify its current valuation of ~$9.50/share, UTI mustgrow NOPAT by 17% compounded annually for 12 years. UTI's actual results and financial condition may differ materially from those indicated in the forward-looking statements. Once completed, the acquisition will add Concorde Career Colleges to Universal Technical Institute, Inc.'s brand family, which currently includes Universal Technical Institute, Motorcycle Mechanics Institute, Marine Mechanics Institute, NASCAR Technical Institute, and MIAT College of Technology. UTI is making more than $15 million in scholarships and grants available to students in 2022. SOURCE Universal Technical Institute, Inc. Download our catalogs and learn about programs, courses, tuition, fees, admissions and much more. The boards of directors of both companies have unanimously approved the agreement. Second Quarter Fiscal Year 2022 Results conference call, https://www.bls.gov/ooh/healthcare/home.htm. [2], In January 1998, UTI acquired Clinton Harley Corporation and Clinton Education Group, Inc. for $26.3 million. Concorde Career Collegesoperates 17 campuses across eight states under the brands Concorde Career College and Concorde Career Institute, focused on preparing America's next generation of health care and dental professionals for rewarding careers. Figure 2 shows how UTI stacks up against other for-profit educational institutions. In the second quarter that continued with a year-over-year growth rate of 14 percent. The company recently doubled its application fee to attract higher quality applicants, which caused the number of applicants to fall 27%. Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Between 2009 and 2011, revenue grew by 23% and NOPAT increased by 80%. That's unlikely to happen, and there's little in the way of it continuing its free fall; although a new CEO would probably give the company a temporary boost, and if the right person, may even help to generate sustainable growth for the company. Universal Technical Institute of Illinois, Inc. is approved by the Division of Private Business and Vocational Schools of the Illinois Board of Higher Education. out by completing and submitting the form below. Find out what some of our graduates are doing today in pursuing their successful careers. Come take a look at our hands-on labs with state-of-the-industry equipment and technology. Net Price $21,726 / year National $15,523 Average cost after financial aid for students receiving grant or scholarship aid, as reported by the college. 47) The U.S. Bureau of Labor Statistics projects that total national employment for Automotive Service Technicians and Mechanics will be 743,800 by 2031. You can exercise your right to opt Is the Trade School Industry a Sinking Ship? Considering the weak competitive position of UTI, the only likely reason I can discern for UTIs higher valuation is its 4% dividend yield. The Company is comprised of two divisions: UTI and Concorde Career Colleges. Is this happening to you frequently? EBITDA stood at $4.2 million in comparison to $89.5 million in 2012 in the second quarter. Find out more in our resources. 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